I think we are pretty lucky in this industry. Beyond just the profit motivation, we all seem to be genuinely enamored with cutting, stripping, crimping, testing, and designing of wire harnesses and cable assemblies. It seems to captivate us in a very positive way. Get a few of us in a room and you’ll see. Maybe we’re all just crazy. If the latter is the case, then it’s contagious, and George Klus has it.
I came across George’s name through longtime acquaintance Norm Sagon at the WHMA conference in February. Norm came up to me and said he just started representing a company, and I really needed to talk to the owner. I’m glad he did, because George has a slightly different story than we’re used to reading on these pages. You see, George spent much of his professional career in the healthcare industry. He purchased MNSTAR, a harness manufacturing company in northern Minnesota, about 18 months ago. In a recent conference call, along with Tammy Wersal, Vice President of Operations at MNSTAR, we discussed what led George to purchase the company. We then pivoted to some specifics on MNSTAR.
“My background is all healthcare,” George informed. “I did that as an executive and then as an entrepreneur owning my own businesses as a provider to the industry for 20 years.” After selling his business, he began consulting with people who were looking for a business venture, or just searching for their next opportunity. “I discovered there were a lot of people with a lot of experience in manufacturing who were looking for their next gig. When I listened to these folks talk, I became inspired by how excited they were about manufacturing,” he told.
George became determined to harness his own energy and resources, along with these folks who were mostly in their 60’s. “I decided I would go out with some of them and start looking for manufacturing companies that I could purchase,” he said. “I could then bring in these folks with their years of experience.”
And so, about 24 months ago, George started looking at companies in various sectors of manufacturing. He made offers on several but ended up buying a harness business. “I have fallen in love with wire harnesses,” George exclaimed. “I’m fascinated by all the different areas that are using harnesses and the variety of industries they cross.”
George proceeded to give some historical perspective on the company. “When I bought MNSTAR, they had been around for about 20 years. I think it had a very nice brand and was known in different industries for building quality products.” But he indicated the business was at the point where it needed fresh ownership and capital to flourish. “I started 18 months ago with 28 Employees, and now we’re up to 44 and continuing to grow and do new things.”
George handed the conversation over to Tammy who he brought in to manage MNSTAR’s operations. But he quickly made an important clarification that she, no doubt, appreciated. “Now I want to make sure you know that Tammy is not part of that age group that I described earlier, but she’s one of the best people I’ve ever hired, and I depend on her a lot. She is a just a phenomenal leader for me at this business.
Tammy indicated that MNSTAR has historically been a supplier of build-to-print harnesses, cable assemblies and panel builds for marine, government/D.O.T., first responder fleets, agriculture and other industrial markets. Like many in the industry, they have become much more involved in the design phase, but they do so with an added twist. “We’re a little different in that we go on site to our customers to help them with design,” she informed. Whether its crawling around in the hull of a boat, taking measurements on a berry picker, or ascertaining the best dimensions for a panel on a fire truck, MNSTAR engineers go to the source when determining proper fit, form and function.
Many of the assemblies and panels that the company makes go into products exposed to harsh environments. One application the company is particularly proud and excited about is the control panels and assemblies on forsnowplow vehicles. That’s because the components they are replacing were made by MNSTAR and have been in service for over 15 years. “In northern Minnesota there is salt on the roads nine months out of the year with extreme temperatures of 37 below — and that’s air temperature, not windchill — and they are just now having to replace these components,” she revealed.
MNSTAR takes great pride in their high-quality standards. They use Cirris test equipment as their gold standard for quality assurance and do 100% testing. “It doesn’t go out of the plant unless it is tested,” Tammy assured. “When we do first articles, they always get the test data report, but some customers prefer the data with every harness we build for them. But even if they don’t request the data for each product, those test results are stored on our database and we can pull them up at any time.”
Like everyone else, MNSTAR is facing supply chain issues. One way they have sought to overcome this is through the standardization of components where possible. “We do a lot of braiding, and because of the marine and fire industries, we have to use a premium quality braid,” Tammy advised. “I don’t carry two different types of braiding material, I only use the highest standard, so all of our customers benefit from that.”
They operate in a similar manner with Deutsch as their preferred connector supplier. Overall, this strategy gives them leverage in buying power. “If the customer did the designs, we always ask their permission to substitute a more readily available option. If we do the design, we will make that call but let them know what we are using. Either way, we always make sure that with any substitution, the form fit and function are exactly the same so there is no impact on quality or performance,” Tammy detailed.
To bring in new business, MNSTAR has one full-time salesperson, Jim Johnson, who has been selling for them for 10 months, but has years of sales experience. They have also brought on Norm Sagon along with another independent contractor. These entities are already busy expanding the company’s customer base by looking for opportunities nationally.
Knowing how difficult it is to onboard new employees over the last couple years, I asked how they’ve been able to grow so quickly from a personnel perspective. Tammy indicated that because they’re in a rural setting, there is much less transiency than one might get in a big city. As such, they’ve had great success in pulling folks from surrounding towns to employ. It’s not the big city life, rather it’s a much more deliberate and dedicated culture.“The people who live here love to be out in the country. They like their acreage, and they like to hunt and fish,” she asserted.
To increase the attractiveness of MNSTAR to the locals, the company has increased wages, added a benefit package for the first time, and has also instituted flexible work schedules. “They are all very proud of what they do and that’s something you don’t always find in a bigger city. We are lucky and fortunate to have that.”
In order to promote their visibility in the community, George and his team have opened up the facility to anyone who would like a tour. “We want the community to understand what we do and what we provide for our employees and the community, so that’s just been a fun thing for us to do,” George revealed. This strategy has proven to be a great recruitment tool for the company. It also helps George assure the local community that MNSTAR is there to stay. “I will tell you this,” said George, “one of my philosophies when looking at a company to buy is that I will never move it. These employees have made MNSTAR what it is, and it belongs to this community and I want everyone to know that I came in to grow the business, because I’m a grower, not a maintainer.”
The company already has plans to more than double the footprint of the facility. “I have worked on the financing, and within the next 24 months we will go from a 24,000ft.² facility to 54,000 ft.², and that’s just phase one of our growth,” George informed. There is a constant push to upgrade tooling and equipment to build more quality products for current and future customers.
Like most of these interviews I do, it’s tough for me to put into words the passion and enthusiasm that came through in my discussion with George and Tammy. They’ve fallen hard for this industry, and they have dedicated their professional future to it. George is currently under contract to purchase another harness manufacturer and has already made plans to look at a third. I look forward to hearing more from him as he continues to grow in the industry.
MNSTAR was recently featured I’m fox businesses manufacturing marvels. You can watch the video by following this link: https://bit.ly/36WJ4qV.
